By Gregory Korte
The Cincinnati Enquirer

Cincinnati City Council today approved a $52.2 million plan to keep the Convergys Corp. downtown.

The vote was 8-1, with Vice Mayor Alicia Reece casting the no vote.

The tax incentive package, the largest in the city's history, passed after two weeks of debate about not only the merits of the deal but the wisdom of taxpayer subsidy for large corporations.

In the end, council members agreed to a plan that combines tax credits for creating new jobs with direct city payments to Convergys.

Convergys, a worldwide customer care and billing company, sought public assistance so it could consolidate its 1,450 downtown workers into the Atrium One building at 201 E. Fourth St. The company promises to add another 1,450 jobs over 15 years.

Without city assistance - and another $144.2 million in state grants, loans and tax credits - Convergys said it would have to look elsewhere to build its world headquarters.

The plan as adopted today gives Convergys $22.4 million in job creation tax credits over 15 years and $29.8 million in city grants over six years. The city estimates the value of the deal at $52.2 million over 15 years.

In a separate 6-3 vote, council authorized the port authority to issue the bonds that Convergys can use to purchase the Atrium One building. Reece and councilmembers Dave Crowley and Y. Laketa Cole voted against the authorization.

Mayor Charlie Luken originally negotiated a $63.4 million incentive package that was scuttled hours before a July 15 vote. Council members worried most about the effect of using job retention tax credits, a form of ongoing subsidy that gives Convergys a direct refund on earnings taxes paid by its employees. Those credits would have come directly out of the city's operating budget.

The alternative plan by council members David Pepper and Chris Monzel uses downtown property tax money earmarked for riverfront development.

A report by the city manager said adoption of the Pepper-Monzel would all but freeze development downtown for six years. Depending on economic conditions, it could also jeopardize financing for everything from the convention center expansion to the Kroger parking garage, City Manager Valerie Lemmie said.

Still, she figures that the new plan is roughly equivalent to the original $63.4 million proposal to keep Convergys. By taking out the effects of inflation and interest, she said both are worth about $39.8 million in today's dollars.

E-mail gkorte@enquirer.com